POSITION REALITIVE TO TARGET

When we talk about our a position, there are several factors to be mindful of:

1 - Where the entry has been placed

2 - The size

3 - Planned exit (For a loss or for a gain)

Once into a position, you track its progress, and then if the position goes longer than expected, you have to do some homework...

First thing to do is to check your trading plan, or system.   What are the rules?  Have you been following the rules?  DID you follow the rules when you entered into the position?

Secondly, Did you back test to determine what the maximum deviation has been for the system that you are running?  If the answer is "NO", then you need do perform that task before going any further.   If you already have and you have determined that you are still within the parameters you have set out, then proceed on...

Thirdly, Where is the trend?  The Trend is your friend!

That Third one catches up a lot of people when determining where they are at relative to their target.

Reference the chart below (Click to enlarge)

 

With an hourly chart, the trend is going up, but not in a smooth way.   It's not the best example of determining where we MAY predict where price will find itself.

The above chart is a D1, the yellow line is the original trend line that we drew for the H1 chart, and the green line is the trend line for D1.

Both are showing an upward trend, however, to get to where we would like to be (Around 1.0900) we may have to endure a bit of downward pressure before we continue with the upward trend.

BUT

Same Pair, but on a Weekly chart, note that this goes back to 2020.   Same trend lines, however, everything here is pointing to an upward climb of price.

In the end, when following a system, when trading, when you click "OK" to enter a position on any market, remember that your system is there to protect you.

If you were a money manager you would have to answer to questions regarding these types of things.  And the reason for such is because it is your JOB.

You would also be paid to provide your knowledge and experience in the markets, so don't forget that you are being paid to give the best advice given the market circumstances.

WHICH leads me to today...

As we come out of the Covid induced hangover, we are looking at (and reacting to) the markets digesting of news.  Surprisingly, Goldman Sachs reported a much worse than expected dividend to their stock as a result of increased costs relating to Covid, Inflation, and the cost to maintain assets.

How about that last one?  A bit unusual on first glance, however, because Goldman does not give information regarding their portfolio, the only other option is to read through an S1 or some other filing with the SEC to determine what businesses they have their hands into that they feel will make their shareholders a profit.

Because of their bad news, they pulled the DOW down (Yes, because of how stocks are weighted, one bad apple can spoil the whole bunch) at one point to a 400+ point loss.

Looking at the pemarkets, The DOW is down 67 points as of 10:41PM Eastern time.

What makes this all relevant?

Trading is not easy and there are a lot of moving parts.  HOWEVER, if you have a system... A plan... A strategy, you can weather the day to day storm.

Full disclosure, I had anticipated that we would have taken profit some time today on our position in the EUR/USD.   However, that is still an open topic for discussion as of this posting.

It was felt that there would be some benefit to illustrate what goes on in a traders mind when a position is placed.

MORE UPDATES TO COME UNTIL WE EXIT.